ECON3315 International Economic Issues Instructor: Patrick M. Crowley Issue 6: Immigration

Overview Migration – what is it? Migration – what is it? Why do people migrate? Why do people migrate? Where do they migrate to? Where do they migrate to? Migration statistics Migration statistics Migration – is it desirable? Migration – is it desirable? Legal vs illegal migration Legal vs illegal migration Economic effects of migration Economic effects of migration “East Europe migrants help take jobless to six-year high” (Headline in the UK Daily Mail, 17 August 2006)

Migration – what is it? Labor migration can occur within a country, or between countries International migration can occur for reasons of religious persecution, political beliefs, war, following other members of the family, or for economic reasons When international migration for economic reasons occurs, it is mostly between developing/transition countries and developed economies Some migration occurs legally, and some illegally. In the EU, migration can occur legally between all member states, although some CEEC have limitations Roughly 3% of the world’s population lives outside it’s country of birth – not a lot when you think about it.

Why do people migrate? People migrate for economic & demographic, political and social and cultural factors People migrate for economic & demographic, political and social and cultural factors There are both push and pull factors There are both push and pull factors

Where do they migrate to? Often migration occurs to a specific country because of i) perceived jobs available in that country ii) family members already resident in that country iii) wage differentials being large with that country iv) reasons of language and culture v) geography These patterns can be seen by looking at destination countries and where migrants predominantly come from

Immigration inflows

Destinations for migrants

South-south immigration as important as north-north immigration

Immigration – Economic questions Q: Has migration led to unemployment? A: No Q: Has migration driven down wages? A: Depends on sector – results mixed Q: Does migration cost the taxpayer? A: Short term, yes; Long term, no Q: Does migration damage developing countries? A: Skilled labor, yes; non-skilled, no; remittances Q: Does migration hurt migrants? A: Depends on skill levels – 20% return home…

International migration is nothing new…it has just become more politically charged in the US…

Migration statistics So, as of 2000, US had the largest stock of international migrants, but… So, as of 2000, US had the largest stock of international migrants, but…

Migration statistics …it didn’t even register on the list of countries with the largest % of migrants

Migration: is it desirable? Migration is desirable, particularly if it brings certain skills to the work force of the recipient country. So it is important to know the skill set that migrants have…

Migration: is it desirable? Migrants are on average more educated and less educated than the resident population Migrants are on average more educated and less educated than the resident population

Migration – is it desirable? Presumably, legal immigration is desirable as long as the migrants can find/get gainful employment….

Legal vs illegal immigration This is a complex issue, particularly in the US and EU. This is a complex issue, particularly in the US and EU. Governments try to curb illegals Governments try to curb illegals

Economic effects of migration Economic theory suggests that if migration were zero cost and also legal to everywhere, then wages across countries would equalize So unless there is excess demand for labor in a certain industry, by increasing labor supply, ceteris paribus, there will be some downward pressure on wages. Effect should also increase wages in country of origin There is some evidence of this happening in certain industries in the US, but it is not widespread Also migrant remittances back to the origin country – Mexico is a particularly large recipient (then India, Philippines, Morocco, Egypt)

Migrant remittances